Earlier this year, both Uber and Lyft drivers across the country experienced severe rate cuts, reportedly down by as much as 40%. That’s when Christopher David – an Uber driver himself at the time – saw an opportunity for a decentralized, driver-owned rideshare.
Think of Arcade City as Uber on Ethereum. At its launch, the app saw “a crazy number” of drivers sign up locally in New Hampshire, David told Bank Innovation. “We wanted to free the drivers from Uber’s centralized management of pricing, to make ridesharing decentralized using blockchain technology. It quickly turned into an actual Uber competitor,” he said. “We have 5,000 drivers signed up in 27 states. It grew so much, that we had to take down the proof-of-concept website and the app.”
After an initial VC/angel funding (plus winning a prestigious Innovation Award in Europe), and ramping up its “blockchain angle,” Arcade City is coming back with a new app next week in the new Austin headquarters, David said.
The first version will still be simple, it will be a multifaceted integration over the course of this year. We will use blockchain for payments. Some of our drivers now already accept bitcoin for payments, and later we plan to launch Arcade tokens too. Investors will also be able to buy crypto-equity. But eventually our entire theory is based on Ethereum and smart contracts. It allows for a trusted relationship with sensitive data, without a central intermediary, so our drivers become the basis of the open ecosystem.
Similar to Uber, riders will also be able to link their credit or debit cards to pay for their rides, with 10% of each transaction transferred to Arcade City. “That’s way less than Uber and Lyft takes,” he added. “Our goal is to eventually get rid of cards, and incentivize people to pay in Arcade tokens, by waiving some fees, for example.”
The OEM space has been making moves into the rideshare space in the past few years (just this week Toyota signed with Uber, while Volkswagen sealed a deal with Gett), and Arcade City didn’t stay unnoticed, David said.
We have already had productive conversations with two major OEMs. It’s still early to talk, but there are definitely people that are looking. It will make sense for us to strike a partnership to provide our drivers with vehicle lease deals. But we are looking at it a bit differently than Uber and Lyft. We will be doing a token sale instead of an equity round, and we already have a VC arm of a major manufacturer interested to participate in the sale. Look at what the Ethereum token sale did. The trajectory in value can get crazy.
For now, David said, the startup is looking to establish an Uber-like insurance deal for its drivers. With a more “simplified” launch next week, the startup expects to go full-Ethereum in a few months.2 - Readers Like This Post